Budget 2017: Water prices to rise by 30% over 2 years

SINGAPORE: Water prices will increase by 30 per cent in two
phases over the next two years, starting from Jul 1 this year. This is
the first time in almost 20 years that the Government is revising water
prices.

Finance Minister Heng Swee Keat announced this in his Budget address
on Monday (Feb 20), almost two weeks after Environment and Water
Resources Minister Masagos Zulkifli indicated the Government’s intention
to do so.
In his speech, Mr Heng said prices need to reflect the rising costs
associated with supplying water. He said the cost of producing water has
increased with the Government building more desalination and NEWater
plants, as well as laying deeper pipes amid an urbanised environment.
Mr Heng said that such costs are necessary investments. “Water
sufficiency is a matter of national survival,” he said. “Imported water
and local catchment water currently meet more than half of our water
demand, but both sources depend heavily on weather conditions.”
Earlier this year, there was a fear that Singapore’s supply of water
from the Johor River could be significantly affected if 2017 turned out
to be a dry year. The Linggiu Reservoir, which is a critical factor in
Singapore being able to abstract water from the Johor River, saw
historically low water levels in 2016.
Mr Heng said the increase in water prices will be seen through the
restructuring of the Sanitary Appliance Fee (SAF) and the Waterborne Fee
(WBF) into a single volume-based fee. Providing more details, national
water agency PUB said these two fees currently go towards meeting the
cost of treating used water and maintaining the used water network. The
single volume-based fee is a better reflection of the volume of used
water discharged, it said.INCREASES TO WATERBORNE FEE, WATER TARIFF AND WATER CONSERVATION TAX
PUB said the WBF fee will increase to 92 cents per cubic metre for
households that consume 40 cubic metres of water or less each month,
from July 2018. A second tier of the fee will be introduced at a rate of
S$1.18 per cubic metre for households which use more than 40 cubic
metres. PUB said this is to discourage households from using excessive
amounts of water.
The potable water tariff and the water conservation tax will also be
adjusted. For example, the tariff for households that consume more than
40 cubic metres of water a month will eventually increase to S$1.52 from
July 2018, up from the current S$1.40. Water conservation tax, which is
based on thewater tariff,will go up
to 65 per cent from July 2018, up from the current 45 per cent, for
households that consume more than 40 cubic metres of water each month.
The above changes will see the price of water going up by 30 per cent, PUB said.
Mr Heng, however, said that for 75 per cent of households, the
increase in monthly water bills will be less than S$18 from July 2018.
For three-quarters of businesses, the increase will be less than S$25 a
month.
The Finance Minister added that the Government will introduce measures to help lower- and middle-class income households offset the increase.
These include an increase in the GST voucher - Utilities-Save
(U-Save) rebate to offset utilities bills; a one-off GST Voucher - Cash
Special Payment of up to S$200 for eligible recipients; an extension
of the rebate for service and conservancy charges (S&CC) and a
personal income tax rebate of 20 per cent, capped at S$500.

WATER PRICES FOR NON-DOMESTIC SECTOR
Water prices for the non-domestic sector, which makes up 55 per cent
of total demand, will also be revised. PUB said that from July 2018, the
water tariff for such consumers using potable water will be increased
to S$1.21 per cubic metre, up from the current S$1.17. The water
conservation tax will increase to 50 per cent of the water tariff, up
from the current 30 per cent. PUB said the adjustments will take place
in phases over two years.
Mr Heng said a water conservation tax on the sector’s use of NEWater
will also be introduced. This will be at 10 per cent of the increased
NEWater tariff, starting from July this year.

- CNA/mo

Budget 2017: Water prices to rise by 30% over 2 years
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